Methodology & Assumptions

How SolarDecision calculates payback periods, savings, battery value, and more.

SolarDecision generates personalised solar and battery recommendations by combining your electricity bill data with industry-standard assumptions and publicly available pricing. This page documents every calculation, assumption, and data source used.

Solar Payback Period

The payback period estimates how many years it takes for electricity savings to cover the upfront cost of the system.

Total installed cost is derived from the Solar Choice Price Index, which collects pricing data from over 200 installers across Australia. Costs vary by location, system size, and equipment tier.

Estimated annual savings = Self-consumption savings + Export earnings. Self-consumption savings are calculated as the retail electricity rate multiplied by the portion of solar generation used directly in the home. Export earnings use the feed-in tariff rate multiplied by remaining solar generation.

Solar Savings Estimate

Annual savings depend on three inputs:

• System size (kW) — determines total generation potential
• Self-consumption rate — what fraction of solar power is used directly vs exported
• Electricity tariff & feed-in tariff rates — the $/kWh values for imports and exports

The default generation ratio is 1,300 kWh/kW/year, which is a conservative average for Australian capital cities based on Clean Energy Regulator postcode data. Actual generation varies by location, roof orientation, tilt, and shading.

Panel Degradation

Solar panels lose output over time. We assume a degradation rate of 0.5% per year, consistent with NREL reliability research and typical manufacturer performance warranties. Over a 25-year system life, this results in approximately 12% total output reduction.

The degradation rate is applied linearly to annual generation figures in long-term projections. Most panel warranties guarantee at least 80% of original output after 25 years.

Electricity Price Ranges

Import tariff rates used in estimates reflect typical retail electricity prices in Australia, sourced from the Australian Energy Regulator's wholesale market data:

• Import tariff: 25–35 c/kWh (flat rate, varies by state and retailer)
• Daily supply charge: 80–150 c/day
• Time-of-use tariffs are not separately modelled — estimates use a blended flat rate

Actual tariffs depend on your location, retailer, and plan. Using your uploaded bill ensures the estimate uses your real rates.

Feed-In Tariff Handling

Feed-in tariff rates vary significantly by state and retailer. SolarDecision uses the following approach:

• Default rate: 4 c/kWh (conservative estimate for general use)
• State-specific lookup: If enabled, the system consults a data set of median feed-in tariff rates per state, sourced from the Australian Energy Regulator and Solar Choice FiT comparison data
• User override: You can enter your actual feed-in tariff rate from your bill for a more accurate estimate

FiT rates change frequently. The values used are indicative and may differ from your retailer's current offer.

Battery Payback Logic

Battery payback is calculated separately from solar payback. The key inputs are:

• Battery usable capacity (kWh) — how much energy the battery can store
• Battery installed cost ($) — supply and installation, sourced from the Solar Choice Battery Price Index
• Usable throughput per day — how much stored solar is discharged to offset grid purchases, based on your evening usage and self-consumption profile
• Grid import tariff — the rate saved by discharging stored solar instead of buying from the grid

Battery payback does not account for time-of-use tariff optimisation, future electricity price increases, or battery degradation. These factors can significantly affect real returns.

System Size Recommendations

The recommended solar system size is based on your average daily electricity usage. The system is sized to cover 60–80% of daytime usage, balancing self-consumption against export.

Optimal system sizing uses Google Solar API data when available (roof area, shading, orientation), combined with your daily usage to find the most cost-effective size. If Google Solar API data is unavailable, a rule-based estimate is used.

Limitations & Uncertainty

All savings estimates and payback calculations are projections, not guarantees. The following factors introduce uncertainty:

• Electricity prices change over time — historical trends show increases, but future movements are uncertain
• Feed-in tariff rates are set by retailers and can change at any time
• Weather and seasonal variation affect solar generation year to year
• System degradation is an average — individual panel performance varies
• Inverter replacement costs (typically every 10–15 years) are not included
• Government rebate and incentive changes are not fully modelled
• Installation costs are estimates based on market averages — actual quotes may differ

Estimates should be used as a decision-support tool, not as financial advice. Always obtain multiple quotes from licensed installers before purchasing.

Data Sources

• Clean Energy Regulator — Small-scale installation postcode data (system sizes, installation volumes by state)
• Australian Energy Regulator — Wholesale electricity market data, retail tariff benchmarks
• Solar Choice Price Index — Residential and commercial solar system pricing, battery pricing, feed-in tariff comparisons
• NREL (National Renewable Energy Laboratory) — Photovoltaic module degradation research, reliability testing
• Clean Energy Council — Solar consumer guides, approved product lists, battery storage guidance
• Google Solar API — Roof-level solar potential data (where available)
• User-uploaded bill data — Personalised usage, tariff, and supply charge values

This methodology is for informational purposes only and does not constitute financial or investment advice. All figures are estimates. Actual outcomes depend on your specific circumstances, equipment choices, and future market conditions.